![]() Swing trading is not easy, and please make sure you only risk money that you can manage to live without. However, you can also waste time and money if you don’t make swing trading work. However, why not do both – swing trading and buy and hold – as we do? If you backtest and do swing trading systematically, we believe most rational investors can make excellent risk-adjusted returns. Efficiency gains are transferred to owners of companies that produce goods and services, and thus owners are rewarded in the long run.īecause of this, we believe that a buy-and-hold portfolio consisting of mutual funds/ETF and stocks (or both) should always be the cornerstone of your savings and capital. The main advantage of buying and holding is that it works as long as we as a society can become ever more efficient. Warren Buffett made 99% of his wealth after he turned 50! This is how compounding works: you need time, a long runway, and lots of patience. Is It Better To Trade or Invest In Stocks? (What’s The Difference?) ![]() But of course, this is a “get rich slowly” approach that requires decades. Time will compound your capital while you do nothing and continue your everyday life. Our answer is: yes, for the majority, it makes sense to buy some mutual funds and forget about it (but save regularly). Why swing trade? The advantages of swing tradingīuying and holding stocks have returned about 10% annual CAGR over the last 100 years, and many see little value in trying to time and trade the markets by swing trading. If you are interested in learning more about swing trading, we recommend reading this swing trading guide.
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